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From raw material to product:
The AGRANA value chain in the
Sugarsegment

Raw material procurement
in the Sugar segment

Sustainability is an integral element of AGRANA's corporate philosophy. For us, this commitment begins long before the industrial processing of agricultural raw materials, namely during their procurement. With the Sugar segment, we are active in Central and South-eastern European markets. We process sugar beet and raw sugar into a range of different sugar products, which are sold to downstream industries and to food retailers under the name "Wiener Zucker" and other country-specific brand names.

In the 2017|18 financial year, we processed 6.2 million tonnes of sugar beet procured from contract growers based in the EU. Contractual farming enables close cooperation with our suppliers, ensuring and documenting the use of good agricultural practices as well as fair working conditions, which we ascribe to in our general principles for the procurement of agricultural raw materials and intermediate products.

The "Mont Blanc" project for efficiency improvement, started in the 2012|13 financial year, contributes to sustainability with a wide range of seminars and other activities to make more efficient use of resources to the benefit of farmers, the environment and society.

In the 2017|18 financial year the previously voluntary completion of the FSA questionnaire becamemandatory for some contract suppliers. As called for by the SAI FSA Implementation Framework published in June 2016, selected farmers in all five beet-growing countries (Austria, Czech Republic, Hungary, Romania, and Slovakia) participated in the mandatory FSA self-assessment and the external audits to SAI standards. Based on the results of the external verification, AGRANA’s Sugar segment is entitled to claim gold or silver status under SAI standards for more than 75% of the statistical population of all sugar beet growers. AGRANA’s minimum requirements are fulfilled by all contract beet growers; areas of potential for improvement identified by the audits are addressed through existing training programmes.

Membership in the SAI :

We produce sugar by refining raw sugar from sugar cane at a number of our production sites in the Sugar segment. We procure this raw sugar from traders from least developed countries ( LDC ), or from Brazil. We have been a member of Bonsucro since 2014 so as to be able to ensure sustainability along the supply chain for our raw sugar intermediary product as well. This enables us to acquire raw sugar from sugar cane certified in line with Bonsucro 's sustainability criteria.

With the Bonsucro "Chain of Custody" certification of our refineries in autumn 2014, we have since been in the position to offer refined sugar with sustainability certification. Our certification means that our customers are also permitted to use the Bonsucro logo on their products. We have also been offering certified FairTrade products from sugar cane through retailers for many years.

Certifications:

Transportation
in the Sugar segment

Even though the transportation of raw materials and sugar products has a comparatively low impact of between 5% and 10% on the carbon footprint of sugar depending on the calculation method and country, we still try to keep transportation as sustainable as possible both in terms of the infrastructure and commercial viability.

In the 2017|18 processing season, an average of around 36% of the beet was delivered to the sugar factories by rail. This was highest in Hungary at around 65%.

Our sugar production

As a result of our high level of dependence on agricultural crops, we are passionately committed to the careful use and conservation of natural resources. We have taken this self-imposed obligation and created the AGRANA environmental policy, which covers major aspects such as energy use and emissions, water and waste management.

As an energy-intensive processor of agricultural raw materials, we strive to optimise our energy consumption and our energy efficiency on an ongoing basis. In order to achieve these objectives, we are integrating an energy management system, based on standards such as ISO 50001, into our existing quality management system. In the 2017|18 financial year the energy management systems of the Sugar segment’s production sites already certified to ISO 50001 in 2014|15 were recertified. 100% of the production sites within the GRI reporting boundaries thus hold a current certification.

ISO 50001 certified:

In our energy policy, we place particular emphasis on:

  • Natural gasIn the 2017|18 financial year, we met approximately 69% of our direct energy needs with this low-emission fuel.

  • New technologiesWith the installation of low-temperature dryers in sugar factories in Austria in 2011|12, which capture waste heat from earlier process steps and harness it for the drying of desugared beet pulp to produce animal feed, we have since saved emissions of about more than 100,000 tonnes of CO2 equivalent.

  • Increasing the share of energy provided on site with biogasThe Kaposvar sugar plant in Hungary generated about 31.3 million cubic metres of biogas from beet pulp in the 2017|18 financial year. This would have been sufficient to cover approximately 71% of the site’s primary energy requirement for the 2017|18 beet campaign. About 9.2 million cubic metres of the biogas produced at the facility (containing about 54% methane) were refined by the biogas upgrading plant installed in autumn 2015 into approximately 5.2 million cubic metres (prior year: 4.8 million cubic metres) of biomethane (100% methane) for feeding into the local natural gas grid. The biomethane injected into the grid was equivalent to the annual heating requirement of about 2,090 single-family homes (prior year: 1,950 homes).

  • Increasing the share of renewable energiesIn the 2017|18 financial year, we met approximately 8% of our direct energy needs with renewable sources.

  • Continuously improving our specific energy consumption thanks to our energy management systemIn the Sugar segment, we aim to reduce the average specific direct energy use per tonne of core and by-products by 5% by 2020|21 (2013|14 baseline: 2.62 GJ per tonne). In the 2017|18 financial year the Sugar segment thus already met the target for 2020|21 of reducing direct energy consumption per tonne of product output to 2.49 GJ..

The water we require during production is brought in part to the factory with the sugar beet. Sugar beet is made up of approximately 75% water, which needs to be separated from the sugar during the production process. This water is used both for extracting the sugar from the beet pulp and for transporting and cleaning the beet. The water is cleaned and reused time and again.

On-site or external waste water treatment plants ensure that the waste water produced is treated in an environmentally sensitive way in accordance with local thresholds.

Despite water being used very efficiently already at many sites, the water used per tonne of core or by-products should be reduced by a further 5% by the end of 2020|21 (2013|14 baseline: 2.28 m3).

Sugar segment2017 | 18
Water use in m3 per tonne of core and by-products2.14
Waste water in m3 per tonne of core and by-products3.19

It is our operating principle to maximise the utilisation of agricultural raw materials by making valuable by-products, contributing to our economic and social bottom line.

In the Sugar segment, we produce a tonne of by-products for every tonne of sugar. These make an important economic contribution while, at the same time, fulfilling an environmental function.

Given that they are largely used as fertilisers and feedstuffs for animals, they close the material cycle by returning minerals and other nutrients to the land and the food chain.

Sugar segment2017 | 18 in tonnes
Waste disposed72,513
of which hazardous waste198
Waste per tonne of product2.9 %
Hazardous waste per tonne of product0.008 %
Non-hazardous waste disposed by disposal method
Composting1,107
Energy recovery710
Reuse9,866
Recycling4,045
Landfill39,777
Other16,809

An average of 2,134 employees worked in our Sugar segment during the 2017|18 financial year. They are a key factor for success due to their commitment, range of skills, experience and views.

Even in a challenging economic environment, AGRANA endeavours to offer interesting work, opportunities for professional and personal development and training, and a workplace environment in which employees feel integrated, respected and connected.

Employees in the Sugar Segment(at the balance sheet data of 28 February 2018)

Non-permanent staff

149

30.9 %

Permanent staff

1,809

26.5 %

Blue-collar1,063

17.1 %

White collar746

39.8%

Managers

141

24.8 %

Of which Executive Leadership

18

16.7 %

Total

Female

Workplace safety in the Sugar segment

At the end of the day, it is important that all of our employees return home safely. We strive to achieve this objective by means of regular trainings on safe working processes, implementing best practice cases and providing workplace safety materials as part of our zero-accident policy.

In the 2013|14 financial year, we have started to collect workplace safety data across all business segments by means of uniform worldwide criteria.

Injury rate 17 | 18(number of accidents/ 100 employees p.a.)

2.7

0.8

3.4

Lost day rate 17 | 18(number of lost days/ 100 employees p.a.)

36.5

19.7

42.5

Absentee rate 17 | 18(hours missed due to accident and sickness/ 100 employees p.a.)

6,579.4

6,945.5

6,448.7

Total

Female

Male

Working conditions and their verification

In the 2014|15 financial year, we revised the AGRANA Code of Conduct, which establishes minimum (social) standards and rules of conduct for all employees around the world.

SEDEX :

As part of our membership of SEDEX , which we have had since 2009, our production sites perform a SEDEX self-assessment every year. In order to underpin our commitment, we had a 4-pillar SMETA audit at our production sites in Austria, Czech Republic, Hungary, Romania and Slovakia conducted by independent third parties in 2017. The audit reports can be accessed by SEDEX members on the organisation’s online platform.

Employee training hours

The education and training, as well as the personal development, of our employees is important to us. Employees in the Sugar segment completed an average of 31.0 training hours in the 2017|18 financial year. In total, 86.3% of employees completed a training course. Training and development costs amounted to 1.6% of total wages and salaries.

Products

In addition to a wide range of conventional and organic sugar products for use in the food and other industries, as well as for sale in the food retail business, we also produce feedstuffs for animals and fertilisers for agriculture.

Some of our certifications:

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